Balfour Beatty flags robust full-year performance
By Josh White
Date: Thursday 05 Dec 2024
(Sharecast News) - Infrastructure specialist Balfour Beatty reported a robust performance in a trading update on Thursday, with earnings growth expected and plans for further share buybacks in 2025.
The FTSE 250 company said its order book was expected to grow by over 5% this year, surpassing £16.5bn, driven by strong demand in UK energy and US buildings markets.
Revenue was projected to rise about 2% year-on-year, reaching around £9.8bn, supported by growth in support services and the Gammon joint venture in Asia.
Underlying profit from operations (PFO) from earnings-based businesses was set to exceed 2023's £236m, underpinned by a strong performance in support services.
Construction services PFO was expected to remain in line with the prior year, as improved margins in UK construction were offset by reduced profitability in US civils projects due to delays.
Support services continued to deliver margins at the top of its 6% to 8% target range, with revenue growth of approximately 15%.
Infrastructure Investments was on track to deliver disposal gains slightly above the previously guided range of £20m to £30m.
Average monthly net cash was anticipated to be around £750m, up from £700m in 2023.
Balfour Beatty confirmed plans for further shareholder returns in 2025, continuing its capital allocation framework.
The group delivered £160m to shareholders in 2024 through dividends and buybacks, bringing total distributions since 2021 to over £750m.
Operationally, UK construction performed well, with progress on major projects such as HS2, Hinkley Point C, and the SCAPE Civil Engineering frameworks.
In the US, while the buildings segment remained strong, profitability in civils had been impacted by cost delays on certain projects.
The US order book was expected to grow over 10% in 2024, with major contract wins including a $746m highway rebuild in Texas.
Gammon, Balfour Beatty's Asian arm, also delivered growth, with new projects in data centres and civil engineering.
Support services benefited from increased activity in power and road maintenance, securing around £600m in new power orders in the second half.
Notable wins included the Bramford to Twinstead project for National Grid and its selection as a preferred partner for Scottish Power Energy Networks' £3bn tender.
At 1002 GMT, shares in Balfour Beatty were up 0.79% at 455.95p.
Reporting by Josh White for Sharecast.com.
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